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El Paso ISD finance committee hears budget update as state tax changes threaten multimillion-dollar shortfall
Summary
District leaders told trustees April 2 that roughly 60 central-office positions have been identified for attrition-based reductions and that state changes to homestead exemptions and frozen-levy calculations could cut district revenue by millions, jeopardizing a previously balanced budget and planned raises.
EL PASO — At an April 2 finance committee meeting, El Paso Independent School District leaders presented a fiscal year 2027 budget update that outlined administrative staffing reductions and warned trustees that recent state changes to property-tax exemptions and frozen-levy calculations may create a multimillion-dollar revenue shortfall.
"We are looking at central office positions and as they become vacant is opportunities for us to reduce the budget," said Dr. Lusk, opening the presentation on budget development and administrative costs. The presenter said the district has identified roughly 60 central-office positions that can be reduced through attrition while aiming to preserve classroom services.
Patty Cortez, chief of human capital management, described the approach to staffing reductions as an attrition-driven "right-sizing" process and said central-office roles are being re-evaluated and, where appropriate, consolidated. "We are at an estimate of about 60 positions at the district level where we have been able to identify efficiencies," Cortez said.
Budget staff emphasized the district's administrative cost ratio is low compared with state benchmarks. "Our admin cost ratio is 4.12," the presenter said, noting Texas Education Agency metrics set a much higher threshold for concern. Staff walked trustees through how TEA defines the numerator (functions 21 and 41 — central-office leadership and administration) and the denominator (instructional and related functions) and how a recent TEA formula transition affects the reported rate.
Trustees pressed for more granular data, including a breakdown of positions at director level and above and comparisons to similarly sized neighboring districts. Trustee Sutton asked the district to provide per-student administrative spending and to show how recent cuts at higher levels compare regionally.
The meeting turned to revenue projections that staff described as more precarious than earlier calculations. Presenters said the homestead exemption increase to $140,000 and changes to how frozen levies are calculated have reduced expected local revenue. "The communication was that the state would hold us harmless to supplement our revenue with state money. That is not occurring," a budget presenter said, adding that the district had earlier estimated a roughly $20 million hit from the homestead exemption but is now receiving only about $3 million in hold‑harmless support from the state in current runs.
Staff said preliminary model runs show a conservative projected revenue decrease around $4.4 million, but subsequent runs produced larger losses — in some scenarios as much as $13 million. At the time of the meeting the district was working with a projected 5.1 million shortfall for next year while staff continue to finalize personnel changes and line‑by‑line department reductions.
Trustees and staff discussed the district's attendance/average daily attendance (ADA) assumptions, which affect state funding. The snapshot used a 90% ADA assumption; staff said daily attendance currently trends near 92.7% but that year-end ADA is usually lower, and trustees asked for budget scenarios using conservative and optimistic ADA figures so the board can weigh risk when adopting a preliminary budget.
Board members also asked the district to accelerate transparency about how tiered funding (tier one, two and three campuses) is allocated and requested a detailed list of director‑level and above reductions the board had approved through attrition. Staff said a surplus-property plan to monetize underused buildings and assets is under development and will be presented to the board in June, but they cautioned that sales of old school buildings typically generate capital, not recurring operating, revenue.
The committee scheduled follow-ups: a healthcare program update on April 14, a May 12 workshop with a function-by-function budget breakdown, and additional finance updates as TEA finalizes values and frozen-levy calculations. The meeting adjourned at 8:56 a.m.
This article is based solely on committee remarks and presentations at the April 2 finance committee meeting; no formal board votes on the FY27 budget or specific personnel terminations were recorded during this session.
